So who is Carmen Segarra? A fed whistleblower Q&A

Jake Bernstein |
11/1/2013, 6 a.m.

Carmen Segarra outside the Federal Reserve Bank of New York on Oct. 10, 2013.
(Nabil Rahman for ProPublica)

Former bank examiner Carmen Segarra vaulted into public consciousness earlier this month when she filed a wrongful termination lawsuit alleging that the Federal Reserve Bank of New York fired her after she refused to go soft on investment banking behemoth Goldman Sachs.

The Fed hired Segarra in late 2011 as part of a group of examiners brought on to monitor systemically important banks in the aftermath of the Dodd-Frank regulatory overhaul. The Fed wanted experts in key areas — such as operations, compliance and credit risk — to examine the “Too Big To Fail” financial institutions.

Segarra’s career path seemed to make her a perfect fit. Segarra, 41, was born in Indiana, raised mostly in Puerto Rico and graduated from Harvard. Her father, a doctor, encouraged a life-long love of learning. She is a polyglot, fluent in Spanish and French, conversant in German and Italian. Even in the midst of preparing her lawsuit, she continued with classes in Dutch, which she says is “totally messing up my German.”

After getting a master’s degree in French cultural studies at Columbia’s campus in Paris, she went on to law school at Cornell. She then spent 13 years working at different financial firms, including Citigroup and Société Générale. Outside of the office, she held leadership positions in the Hispanic National Bar Association. Hired by the Fed as a legal and compliance specialist, she was told to pay particular attention to how Goldman was complying with the Fed’s requirements on conflicts of interest.

Segarra says she was fired after she found that Goldman lacked an adequate company-wide policy to manage conflicts of interest — and after her superiors urged her to change this finding and she refused. The Fed has denied any wrongdoing in the case, as has Goldman, which is not a defendant in Segarra’s lawsuit.

Readers have asked who is this woman who dared to challenge two of Wall Street’s most powerful institutions. We put some questions to Segarra to learn more about her background.

Bank examiner — to most people that seems an obscure job. What’s the attraction?

I actually studied business law and regulation in law school. I co-wrote a law review article on Y2K [the millennial computer bug], which ended up being published. As a result of that, my co-author and I were asked to work on setting up the Y2K legal and compliance program for a bank. I discovered early on that I enjoyed learning about a law and immediately applying it, much the same way that I enjoy learning and speaking a new language. As a general practitioner, I have worked closely with a wide range of laws and regulations that apply across the banking and investment sectors, as opposed to just specializing in one particular type of law or regulation. As a bank examiner, you get to use that knowledge and those skills to evaluate what others have built, and, if and when necessary, point out ways to improve them.

Some commenters say your story isn’t surprising — investment banking is all about conflicts. Agree?